ARIZONA HOUSE OF REPRESENTATIVES Forty-ninth Legislature - First Regular Session MAJORITY CAUCUS CALENDAR.DOC

MAJORITY CAUCUS CALENDARApril 6, 2009 Upon Adjournment of Floor HHR1 Bill Number Short Title Committee Date Action *Pending Rules Committee Hearing Committee on Banking and Insurance Ana

MAJORITY CAUCUS CALENDAR

April 6, 2009 Upon Adjournment of Floor

HHR1

Bill Number Short Title Committee Date Action

*Pending Rules Committee Hearing

Committee on Banking and Insurance

Analyst: Stacy Weltsch Intern: Azra Hafizovic

HB 2144* insurance; actuarial opinions; financial audits

HB 2199* state compensation fund; employer misrepresentation

HB 2200* workers' compensation; controlled substances

Committee on Commerce

Analyst: Dianna Clay O’Dell Assistant: Brooke Olguin Intern: Maureen Howell

HB 2252* international ports development

(APPROP S/E: international transportation and port infrastructure)

Committee on Education

Analyst: Jennifer Anderson Intern: Cassondra Warney

HB 2497 schools; postemployment benefits

Committee on Government

Analyst: Michelle Hindman Assistant: Zach Tretton Intern: Laurel Johnson

HB 2581* library districts; county reimbursement

Committee on Health and Human Services

Analyst: Dan Brown Intern: Thomas Desmaris

HB 2078* community colleges; bonds; technical correction

(HHS S/E: outdoor behavioral health; definition; requirements)

Committee on Judiciary

Analyst: Kristine Stoddard Intern: Robert Stout

HB 2344* vulnerable adults; financial exploitation

Committee on Military Affairs and Public Safety

Analyst: Thomas Adkins Intern: Scott Handler

HB 2610 civil liability; affirmative defenses

Committee on Natural Resources and Rural Affairs

Analyst: Ralene Whitmer Intern: Sabrina Mericle

HB 2419* special license plates; maintenance

(NRRA S/E: mass appraisal guidelines; state lands)SPONSOR: GOWAN

HB 2177 national park support districts

(NRRA S/E: game refuges; firearms)

HCR 2030 initiative and referendum; voter approval

(NRRA S/E: Arizona's water protection)

Committee on Public Employees, Retirement and Entitlement Reform

Analyst: Stacy Weltsch Intern: Azra Hafizovic

HB 2061* CORP; probation officers; customary employment

(PERER S/E: probation; surveillance; detention officers; retirement)

Committee on Water and Energy

Analyst: Rene Guillen Intern: Becky Rubenstrunk

HB 2335* improvement districts; renewable energy

HB 2336* community facilities districts; renewable energy

(GOV S/E: county renewable energy incentive districts)

HB 2440* drought emergency groundwater transfers

Committee on Ways and Means

Analyst: Kitty Decker Intern: Matt Stone

HB 2346* charter schools; leased property

S/E Committee on Public Employment, Retirement, and Entitlement Reform

X Caucus and COW

House Engrossed

HB 2061 permits certain part-time employees to qualify as members of CORP

Summary of the proposed strike-everything amendment to HB 2061History

CORP

Created by the legislature in 1986, the Corrections Officer Retirement Plan’s (CORP) is one of three plansadministered by the Public Safety Personnel Retirement System It is designed to meet the special needs ofpersonnel engaged in the prison environment Normal retirement commences after the member completes 20 years

of service, the member attains age 62 with 10 or more years of service or the sum of the member’s age and years ofcredited service equals at least 80 points The monthly pension amount is determined by years of credited servicemultiplied by a factor of 2.5 percent multiplied by the average monthly salary

CORP Fund monies consist of member and employer contributions as well as investment income and monies andother assets generated by the operation of the retirement plan The employer contribution rate is different for eachemployer and changes every fiscal year, based upon an actuarial valuation

Currently, Arizona Revised Statute 38-881 defines members as full-time employees who receive

a salary and work at least 40 hours a week for more than six months in a calendar year

 Repeals the act from and after June 30, 2011

 Contains an emergency clause

Amendments

Committee on Public Employment, Retirement, and Entitlement Reform

 The strike-everything amendment was adopted

community colleges; bonds; technical correctionSponsor: Representative Crandall DPA

Committee on Health and Human Services

X Caucus and COW

House Engrossed

HB 2078 makes a technical change

Summary of the proposed strike-everything amendmentThe proposed strike-everything amendment defines and establishes inspection and licensure criteria for outdoorbehavioral health care programs (Programs)

History

Pursuant to Title 36, Chapter 4, Article 2, the Department of Health Services (DHS) licenses and regulates a variety

of health care institutions including home health agencies, nursing care institutions, and children’s behavioralhealth programs

Provisions

 Indicates the Programs shall:

 Comply with the requirements for a level two behavioral health residential agency, as established bythe DHS by rule

 Obtain and maintain national accreditation as a Program

 Ensure that the Program’s personnel comply with requirements regarding fingerprinting that apply tochildren’s behavioral health programs

 Stipulates that in addition to other health and safety standards that the DHS adopts by rule, the DHS mayestablish facility, equipment, and sanitation standards for Programs

 Exempts Programs from any facility standards that apply to a behavioral health service agency

 Specifies that if the DHS determines there is reasonable cause to believe a Program is not adhering to licensurerequirements, DHS staff or specified county officials, may enter any area used by the Program at anyreasonable time to determine if any violations exist

 Stipulates that application for licensure as a Program constitutes permission for any entry or inspection of anyarea used by the Program

 Allows the Director of the DHS to take any statutorily authorized action related to licensure of health careinstitutions against a Program found to be out of compliance with licensure requirements

 Indicates that when a Program’s license has been suspended or revoked, the Program is subject to inspectionupon application for relicensure or reinstatement of license

 Defines outdoor behavioral health care program.

Amendments

Health and Human Services:

o The strike-everything amendment was adopted

H OUSE OF R EPRESENTATIVES

HB 2144

insurance; actuarial opinions; financial auditsSponsor: Representative McLain DPA Committee on Banking and Insurance

X Caucus and COW

The National Association of Insurance Commissioners (NAIC) is the organization of insurance regulators from the

50 states, the District of Columbia and the five U.S territories State insurance regulators created the NAIC in 1871

to address the need to coordinate regulation of multistate insurers The NAIC develops uniform regulations andpolicies for insurance regulators In 2004, the NAIC released revisions to the Actuarial Opinion and MemorandumRequirements (AOMR)

 Specifies that the statement of actuarial opinion is a public document

 Orders property and casualty insurance companies who are domiciled in Arizona and required to submit annualstatements of actuarial opinion to also submit an actuarial opinion summary to be filed according to NAICstandards

 States that companies that are licensed, but not domiciled, in Arizona must provide the actuarial opinionsummary at the request of the Director

 Mandates that property and casualty insurance companies who are domiciled in Arizona and required to submitannual statements of actuarial opinion must also require their appointed actuaries to prepare an actuarial report

in support to the actuarial opinion that is in compliance with NAIC standards

 Stipulates that if the company fails to do so, or if the submitted report is unacceptable, the Director mayemploy a qualified actuary to do the required work at the company’s expense

 Asserts that all documents and materials that are given to DOI in connection with the actuarial report oractuarial opinion summary are confidential, will not be made public and are not subject to subpoena except forthe following purposes:

 To defend an action seeking damages from anyone pursuant to any action required by A.R.S § 697.01(A) or rules adopted pursuant to it The company must give written consent for the release of thematerials

20- Upon request of the American Academy of Actuaries in conjunction with disciplinary proceedings if theAcademy sets forth procedures for preserving the confidentiality of the materials that satisfy the Director

 Emphasizes that nothing in A.R.S § 20-697 or §20-697.01 limits the Director’s authority to use the actuarialreport, actuarial opinion summary or other materials in furtherance of any regulatory or legal action brought as

concerning any confidential documents, materials or information.

 Authorizes the Director to:

 Share any documents, materials or information with other state, federal and international regulatoryagencies, state, federal and international law enforcement authorities and the NAIC and its affiliates andsubsidiaries if the recipient agrees and warrants that it has the authority to maintain the confidentiality andprivileged status of the information

 Receive any documents, materials or information, including otherwise confidential and privilegeddocuments, materials or information from NAIC and its affiliates and subsidiaries and from regulatory andlaw enforcement officials of other jurisdictions The information received is to be kept confidential orprivileged

 Enter into agreements that govern the sharing and use of documents and other information that areconsistent with the provisions of A.R.S § 20-158

 Specifies that any sharing of information under the above provisions does not constitute a waiver ofany applicable privilege or claim of confidentiality

 As of 12/31/10, makes all insurers having $1 million or more in direct premiums written in Arizona in anycalendar year, and more than 1,000 policyholders or certificate holders if direct written policies nationwide atthe end of the calendar year, subject to the NAIC annual financial reporting model regulation for that calendaryear

 Exempts insurers having less than the above stated limits from the NAIC requirements unless the Directormakes a specific finding that compliance is necessary for the Director to carry out statutoryresponsibilities

 Does not exempt insurers that assumed premiums pursuant to contracts or treaties of reinsurance of $1million or more

 Allows the Director to determine whether, consistent with NAIC’s requirements:

 A foreign or alien insurer may be exempt from the reporting requirements if the Director finds itsdomiciliary jurisdiction has a substantially similar law in effect and the insurer has filed its auditedfinancial report and other required information with the Director as otherwise required by the article

 An insurer is required to file an audited financial report earlier than June 1, with 90 days advance notice tothe insurer

 To grant an extension of the June 1 filing date for 30-day periods

 To grant an exception to the rotation requirement for a lead audit partner for an insurer

 An individual meets the qualifications as an independent certified public accountant

 To grant a financial or organizational hardship exemption to allow a qualified independent certified publicaccountant to perform non-audit services for an insurer having written and assumed premiums of less than

$100 million in any calendar year

 An insurer may file consolidated or combined audited financial statements if the insurer is part of a group

of insurance companies that uses a pooling or 100 percent reinsurance agreement that affects the solvencyand integrity of the insurer’s reserves and the insurer cedes all of its direct and assumed business to thepool

 To grant a hardship waiver of the audit committee requirements regarding independent audit committeemembers

 To grant a financial or organizational hardship exemption from compliance with any or all of the annualfinancial reporting requirements

 Eliminates any liability on the part of the actuary for damages to anyone other than the insurance company andthe Director of DOI for any act, error, omission, decision or conduct with respect to the actuary’s opinionunless the actuary engaged in fraud or willful misconduct

 Allows the Director to adopt rules to implement the provisions in the article

 Exempts DOI from Title 41, Chapter 6 for the purposes of adhering their rules to NAIC’s regulations regardingannual financial reporting model regulation and the Director’s authority to grant extensions, exemptions andwaivers consistent with those regulations

 Repeals Laws 1991, Chapter 261, Section 35, which requires authorized domestic insurers to file annualstatements pursuant to NAIC’s instructions until the rules are adopted by the Director

 Changes the heading of Title 20, Chapter 3, Article 8 from Actuarial Opinion and Memorandum Requirements

to Life and Health Actuarial Opinion and Memorandum Requirements.

 Makes technical and conforming changes

Amendment

Committee on Banking and Insurance

 Strikes the provisions relating to the confidentiality of the actuarial report, materials, information and actuarialopinion summary

 Adds actuarial workpapers to be considered among the confidential documents and materials of actuarialdetermination

 Prohibits an actuarial report, workpapers, an actuarial opinion summary and other materials provided inconnection therewith to be subject to public records requests, subpoena or discovery or as evidence in anyprivate civil action

 Stipulates that A.R.S § 20-697 and § 20-697.01 do not limit the Director’s authority to release documents tothe actuarial board, if necessary, or for the use of any regulatory or legal action brought as part of theDirector’s duties, nor do they constitute a waiver of confidentiality

 Prohibits the Director or any person who receives documents of actuarial opinion from testifying in any privatecivil action concerning confidential documents

 Authorizes the Director to share and receive actuarial opinion documents with other state, federal, internationalregulatory agencies, the NAIC and federal and international law enforcement authorities, as long as therecipient agrees and has the legal authority to maintain the confidentiality of such documents

 Allows the Director to enter into agreements governing the sharing and use of the actuarial information

national park support districtsSponsor: Representative Konopnicki

DPA

S/E Committee on Natural Resources and Rural Affairs

W/D Committee on Ways and Means

X Caucus and COW

House Engrossed

House Bill 2177 allows for the establishing of National Park Support Districts within a ten mile radius of aNational Park or National Monument

History of the Strike-Everything Amendment

A.R.S § 13-3112 directs The Department of Public Safety (DPS) to issue permits to carry concealed weapons toqualified individuals Such persons must complete a DPS approved firearms safety course, and must meet thefollowing requirements:

- Is a resident of Arizona or a citizen of the United States

- Is 21 years of age or older

- Is not under indictment for or convicted of a felony in any jurisdiction

- Does not suffer from mental illness and has not been adjudicated mentally incompetent or committed to apsychiatric facility

- Is not unlawfully present in the United States

A.R.S § 17-305 prohibits a person from carrying, possessing or transporting weapons onto game refuges, although

a person is allowed to travel on a road through a game refuge carrying an unloaded firearm A.R.S § 17-231subsection B enables the Arizona Game and Fish Commission to establish game refuges

The U.S Department of the Interior amended federal rules 36 CFR Part 2 and 50 CFR Part 27 with an effectivedate of January 9, 2009 These amendments allow a person to possess, carry or transport loaded and operableconcealed weapons into National Park Areas and National Wildlife Refuges if conforming to the applicable statelaws There are currently nine National Wildlife Refuges in Arizona

Provisions of the Strike-Everything Amendment

 Allows a person with a valid concealed weapons permit to possess, transport or carry the weapon within agame refuge

 Makes technical and conforming changes

Amendments

The Strike-Everything Amendment was adopted in the Committee on Natural Resources and Rural Affairs.

H OUSE OF R EPRESENTATIVES

HB 2199

state compensation fund; employer misrepresentation.

Sponsor: Representative McLain DPA Committee on Banking and Insurance

X Caucus and COW

The policy setting body for the ICA is a five-member Commission whose members are appointed by the Governorand confirmed by the Senate for staggered five-year terms The Commission oversees approximately 322employees and an operational budget of approximately $20.1 million As a non-general fund agency, the IndustrialCommission is funded by an annual tax on workers’ compensation premiums that cannot exceed 3 percent The taxrate for 2007 was 3 percent and remained the same for 2008 [2008 Annual Report of the Industrial Commission]Misrepresentation of payroll, job description or job function of an employee, or the employer’s loss historyaffecting premium payments is a class 6 felony Currently, the penalty for employer misrepresentation is 10 timesthe amount of the difference in premium paid and the amount the employer should have paid

Committee on Banking and Insurance

 Changes the penalty for employer misrepresentation on a workers’ compensation claim to be up to three timesthe amount of the difference in premium paid and the amount the employer should have paid

workers' compensation; controlled substances.

Sponsor: Representative McLain

X Committee on Banking and Insurance

Caucus and COW

Legitimate handlers of controlled substances, such as hospitals and pharmacies, have to register with the Drug Enforcement Administration and use their registration numbers to purchase drugs They must maintain complete and accurate records of all quantities manufactured, purchased, and sold Drugs with higher abuse potential are subject to more restrictions than other drugs For example, registered handlers must use a special order form to obtain Schedule

II drugs And orders for these drugs must be written and signed by practitioners and not phoned into the pharmacy except in an emergency Prescriptions for Schedule II drugs also may not be refilled; patients have to go back to the doctor first Those convicted of unlawful manufacturing, distributing, and dispensing of controlled substances face fines, prison sentences, or both [FDA Consumer Magazine]

According to statute, “narcotic drug” includes opium and opiate and any salt, compound, derivation or preparation of opium or opiate, coca leaves or cocaine and marijuana A prescription order for a schedule II controlled substance drug, excluding a hospital inpatient, shall contain only one drug order per prescription blank Schedule II substances shall not be dispensed without a written prescription order, manually signed by the medical practitioner The prescription shall not be dispensed more than 90 days after the date the prescription was issued, and shall not be refilled In emergency situations, emergency quantities of schedule II substances maybe dispensed on an oral prescription order of a medical practitioner, which must

be manually signed by a medical practitioner no more than seven days after the emergency oral prescription order (A.R.S § 36-2501)

 Requires off-label use of narcotics, opium-based controlled substances or schedule II controlled substancesthat are not consistent with FDA approved labeling to be subject to approval by the insurance carrier,employer, or claims processing representative

 Instructs physicians to submit a report that justifies the use of the controlled substance and a treatment planthat includes the monitoring and prevention of abuse, dependence, addiction or diversion of the controlledsubstance

 Outlines the treatment plan to include a medication contract, documentation that the medication is providingrelief and plans for follow-up visits and urine drug testing

 Enables the insurance carrier, employer or claims processing representative to require an updated report every

30 days from the physician regarding the continued use of the controlled substance

 States that the insurance carrier, employer or claims processing representative is no longer responsible forpayment of medication if the physician does not provide an updated report

 Exempts a carrier or a self-insured employer from the payment of a controlled substance for a period whichexceeds one year upon the closure of a claim for a temporary disability

 Defines off-label use

international ports developmentSponsor: Representative Jones

DPA

S/E Committee on Commerce

DPA

S/E Committee on Appropriations

X Caucus and COW

House Engrossed

HB 2252 transfers the Arizona International Development Authority (AIDA) to the Arizona Department ofTransportation (ADOT), and renames AIDA the International Ports Development Relieves the Department ofCommerce (ADOC) from providing staff support

Summary of the proposed Appropriations Committee Strike-everything amendment to HB 2252:

The proposed strike everything amendment to HB 2252 creates a new chapter in statute for AIDA Providesdirection for AIDA and allows it to receive appropriated funds from the Legislature, as well as from other publicand private sources Transfers administrative and support responsibilities from ADOC to the Department ofTransportation

History

Title 41, Chapter 10, Article 7, Arizona Revised Statutes, outlines the powers and duties of the AIDA and its Board of Directors (Board) The Board consists of seven voting members who are appointed by the Governor to five-year terms from the fields of public finance, international banking, commerce and relations, transportation, infrastructure and related construction, environmental issues, and land use planning, as well as six non-voting advisory members including the President of the Senate, Speaker of the House of Representatives, a designee of the Intertribal Council of Arizona, and directors of the Departments of Commerce, Transportation, and Environmental Quality The Board must include at least one voting member from each of the four border counties: Yuma, Pima, Santa Cruz, and Cochise.

The purpose of AIDA is to engage in any lawful activities to facilitate the development of international trade or

commerce between Arizona and other countries AIDA is authorized to operate in Arizona within 62 miles of the

border, and up to six miles inside Mexico The 1994 enabling legislation prohibited the use of state monies for anycosts incurred by AIDA, including compensation of board members or employees, operational or administrativecosts, any costs of acquiring, operating or maintaining any project, and the costs incurred in the issuance or

payment of bonds A.R.S Title 41, Section 1553.05 states that all costs incurred by AIDA shall be paid from bond

proceeds or from revenues, receipts or other monies of the authority Currently all appointments have lapsed and

AIDA is inactive

Statute authorizes the ADOC to provide AIDA with staff support HB2526 was passed in the House ofRepresentatives last year and was held in the Senate It provided further direction to ADOC and AIDA regardingadministration, operations, staff and the AIDA fund, and allowed AIDA to receive appropriated funds from theLegislature

Provisions

 Repeals the existing AIDA Article in the ADOC chapter of Title 41 and amends Title 41 by adding a newchapter on AIDA.

 Makes changes to some definitions of terms in the section

 Adds a definition of border regional port authority, which is a nonprofit entity based in a county in

Arizona within 62 miles of the Arizona-Mexico border and in Mexico within six miles of the border Itspurpose is to promote trade and commerce in the border area by improving facilities and traffic flow atinternational ports of entry and to promote a membership that reflects a broad cross-section of localgovernment, industry, commerce and the community

 Revises the definition of project to include acquisition or creation of facilities located in the border area for the transmission or transportation of electricity, liquefied natural gas, natural gas and oil and its

derivatives across the United States-Mexico border.

 Renames the Arizona-Sonora border to Arizona-Mexico border and changes the measurement of theArizona-Mexico border from kilometers to miles

 Relieves ADOC of responsibility for supporting AIDA

 Requires ADOT to provide staff support to AIDA to include general administrative, office, equipment and staffsupport, using earnings from the AIDA fund

 Directs the Governor to appoint to the AIDA Board a member of a qualifying border regional port authorityBoard of Directors, if one exists in one of the eligible border counties

 Stipulates that the term for four board members will expire in January of 2015

 Stipulates that the term for three board members will expire in January of 2013

 Eliminates the Director of Environmental Quality as an advisory member of the board

 Removes the requirement that AIDA advertises a projected project and submits it to a governing body forapproval

 Clarifies what comprises the AIDA fund

 Authorizes AIDA to establish any necessary accounts and subaccounts for received monies and to use monies

in the accounts for:

 costs to administer the fund and carry out the requirements of the new chapter;

 compensation and employment-related expenses for staff and professional experts;

 providing grants or loans for international and infrastructure projects

 Expands the fund to be able to accept and use federal and state funds, interest and other income received frominvesting monies in the fund, gifts, grants and donations received from any public or private source and anyother monies received by the authority

 Terminates AIDA on July 1, 2019 and repeals the AIDA statutes on January 1, 2020

Amendments

Committee on Commerce

A strike-everything amendment was adopted with the following provisions:

 Repeals the existing AIDA Article in the ADOC chapter of Title 41 and amends Title 41 by adding a newchapter on AIDA

 Makes changes to some definitions of terms in the section

 Adds a definition of border regional port authority, which is a nonprofit entity based in a county in

Arizona within 62 miles of the Arizona-Mexico border and in Mexico within six miles of the border Itspurpose is to promote trade and commerce in the border area by improving facilities and traffic flow atinternational ports of entry and to promote a membership that reflects a broad cross-section of localgovernment, industry, commerce and the community

 Revises the definition of project to include acquisition or creation of facilities located in the border area for the transmission or transportation of electricity, liquefied natural gas, natural gas and oil and its

derivatives across the United States-Mexico border.

 Requires ADOT to provide staff support to AIDA to include general administrative, office, equipment and staffsupport, using earnings from the AIDA fund.

 Directs the Governor to appoint to the AIDA Board a member of a qualifying border regional port authorityBoard of Directors, if one exists in one of the eligible border counties

 Stipulates that the term for four board members will expire in January of 2015

 Stipulates that the term for three board members will expire in January of 2013

 Eliminates the Director of Environmental Quality as an advisory member of the board

 Removes the requirement that AIDA advertises a projected project and submits it to a governing body forapproval

 Clarifies what comprises the AIDA fund

 Authorizes AIDA to establish any necessary accounts and subaccounts for received monies and to use monies

in the accounts for:

 costs to administer the fund and carry out the requirements of the new chapter;

 compensation and employment-related expenses for staff and professional experts;

 providing grants or loans for international and infrastructure projects

 Expands the fund to be able to accept and use federal and state funds, interest and other income received frominvesting monies in the fund, gifts, grants and donations received from any public or private source and anyother monies received by the authority

 Terminates AIDA on July 1, 2019 and repeals the AIDA statutes on January 1, 2020

Committee on Appropriations

 The strike-everything amendment was adopted

H OUSE OF R EPRESENTATIVES

HB 2335

improvement districts; renewable energySponsor: Representative Mason DPA Committee on Water and Energy

DPA Committee on Government

X Caucus and COW

House Engrossed

HB 2335 allows counties and municipalities to utilize renewable and efficient energy and water conservation units

as well as allows for the creation of a renewable energy district

History

Special districts are non-partisan, limited purpose governmental units that exist as mostly separate entities from thelocal government and have substantial administrative and fiscal independence The residents of a county cancirculate a petition to have a special district, such as an improvement district, formed Special tax districts like theseare a means of funding public improvement projects

Currently there are two major areas of a district that may be improved in an improvement district: streets and waterinfrastructure Streets may be improved via pavement or repavement, widening, grating or regrating, or generalmaintenance Additionally, improvements to streets include the construction and maintenance of sidewalks,walkways, gutters, bridges, and other fixtures Water infrastructure improvements include acquisition, construction,reconstruction, maintenance or repair of wastewater treatment facilities, sewers, ditches, drains, conduits, pipelinesand channels for sanitary and drainage purposes, with outlets or other appurtances in, under, over or through anystreet or any land of the district or any right-of-way granted or obtained for such purpose, either within or withoutthe district limits Water delivery systems are also included